FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - February 3, 2011

The GBP/JPY is developing potential wave C of medium term uptrend - colored magenta in the chart. To confirm wave C break above 132.64 is needed, since it's the top of wave A. As of now the resistances are Fibonacci expansions off 125.47-132.48-129.49, 129.49-132.64-129.75, 129.75-131.96-130.91, and 130.91-132.30-131.78.

Resistances:

- 132.64 = contracted objective point (COP)
- 132.90 = objective point (OP)
- 133.12-17 = confluence area of two OP's
- 133.82 = COP
- 134.03 = expanded objective point (XOP)

If the price reverses down the nearest supports will be Fibonacci retracements of the wave up from 129.75 - this wave is not developed yet.

Overbought/Oversold

Assuming that the medium term trend is up it's preferable to use oversold readings of the Detrended Oscillator or its cross below the zero to consider long positions. The oscillator is slightly above the zero level and moving in flat manner around it, therefore stand aside until the market gets more volatile or the oscillator gets into the oversold - 30 pips to go.

Read more on how to apply Fibonacci studies to calculate price targets.